Bitcoin's Recovery: Macro Momentum Meets Emerging Sell Pressure ∞ Insights

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Briefing

The Bitcoin market recently recovered to $116k, driven by macro-economic anticipation of a Fed rate cut and significant US spot ETF inflows. However, this momentum is meeting renewed sell pressure. While futures accumulation and rising investor profitability signal a stronger sentiment, weakening spot flows, softer funding rates, and increased profit realization point to a fragile market structure, leaving Bitcoin vulnerable if sustained demand does not materialize. US spot ETFs saw net inflows far above their typical range, signaling robust institutional demand.

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Context

Investors are currently questioning the sustainability of Bitcoin’s recent price recovery. Is the market truly entering a new growth phase, or is the rally merely a temporary bounce fueled by external factors, vulnerable to a quick reversal as profits are taken?

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Analysis

Bitcoin’s recent price climb to $116k was supported by a combination of macro factors and institutional interest. On-chain data reveals that the Relative Strength Index (RSI) in the spot market surged into overbought territory, indicating strong upward momentum. However, this was not matched by conviction, as Cumulative Volume Delta (CVD) weakened and trading volumes remained flat, suggesting that sellers were pressing into the strength. In the futures market, open interest increased, and perpetual CVD spiked from aggressive buying, but softer funding rates showed a reduction in long demand, signaling caution despite active leverage.

The options market also displayed growing open interest, yet falling volatility spreads and declining skew pointed to reduced hedging and a more complacent investor tone. Crucially, US spot ETFs experienced significant net inflows, far exceeding their typical range, indicating robust institutional demand and keeping these holders in profit, as reflected by climbing ETF MVRV. Despite these positive inflows, overall on-chain addresses slipped to cycle lows, and transaction fees dipped, underscoring subdued speculative pressure and quieter user activity. While profitability metrics like supply in profit, NUPL, and realized P/L all rose, this broad investor profitability also increases the risk of demand exhaustion as more participants look to lock in gains. This confluence of factors indicates a market that recovered on macro and institutional tailwinds but now faces internal pressure from profit-taking and a lack of broad, sustained spot demand, leading to a fragile balance.

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Parameters

Key Metric – Bitcoin Price Recovery ∞ Bitcoin price recovered to $116k.
Market Momentum Indicator – Spot RSI ∞ Spot market RSI surged into overbought territory.
Institutional Demand – US Spot ETF Inflows ∞ Net inflows into US spot ETFs were far above range.
Futures Sentiment – Funding Rates ∞ Futures funding rates softened, indicating reduced long demand.
Profitability Indicator – Supply in Profit ∞ Supply in profit, NUPL, and realized P/L all rose.
On-Chain Activity – Active Addresses ∞ Addresses slipped toward cycle lows.

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Outlook

The near-term future for Bitcoin appears delicately balanced. While macro tailwinds and institutional investment provide a foundation, the market’s internal dynamics suggest caution. Readers should watch for a sustained increase in spot trading volumes and a reversal in funding rates to confirm continued bullish momentum. A failure to see these signals could indicate that the current recovery is unsustainable, risking a deeper correction as profit-taking continues.